Elizabeth Anderson

612-750-1934

Beth Anderson

612-750-1934

Get advice

Your no-nonsense real estate guide

June 2012

The local market is heating up

In the first quarter of 2012, all statistics that have to do with housing recovery are up in our local market. Watch this video from Edina Realty president Barb Jandric for more info on how these numbers are affecting local buyers and sellers.

Lower your summer energy bills

Heating and cooling can be the most expensive factor of your monthly utility bills, especially in the summer. Here are some tips that will help cut your summer energy costs while still keeping your home cool.

First, plug up holes and seal cracks using foam, caulking and extra insulation. Leaks and holes allow cool air to escape, so you’ll have to run your system longer to make your home comfortable.

Natural light is wonderful, but the heat from the sun will also keep your home from cooling down. Keep your shades closed when you’re not using the room to prevent the sun from neutralizing the air conditioner’s efforts.

Next, clean your air filters around once a month or replace them as needed for optimal savings on your energy bill. To clean them, simply run them under water and air dry before placing them back inside the unit..

Next, clean your air filters around once a month or replace them as needed for optimal savings on your energy bill. To clean them, simply run them under water and air dry before placing them back in.

Consider purchasing a programmable thermostat, which is a relatively inexpensive investment. This device works on a schedule, adjusting the temperature according to your preferences, the time of day and the day of the week. By allowing the temperature to increase when you're away, you can expect to save up to 30 percent on your energy bills annually.

Tips for downsizing your home

After you have chosen to move to a smaller home, it’s important to prepare for a life with less space and fewer belongings. Follow these tips to ensure your downsizing goes smoothly.

First, know the size of your new home in comparison to your current abode. Write down the measurements of rooms and closets, and any spaces you’ll have to move your furniture through – doors, staircases, elevators – to ensure your furniture won’t have any problem entering the home or staying there permanently.

Consider not only what you have, but what you truly need to keep. Perhaps your new home has equal closet space but smaller rooms than your current house. Should you keep all the linens and closet items, and get rid of the hutch and fine china currently on display in your large dining room? Or is it more important to keep the dishes, which means you’ll have to purge your home of much of the current belongings in your closet storage?

If you’re unsure or having a hard time getting rid of items, bring in family and friends to help you decide. If you’re a retiree or near-retiree saving boxes for your children, ask them to either take the things they want or to limit their possessions to one to two boxes. Donate everything else or host a garage sale to sell the items.

Downsizing can be stressful, so try to remain positive throughout the moving process. Become familiar with the area, and choose new grocery stores, post offices and other places you’ll frequent. Focus on the upsides of living in a smaller space – having fewer rooms to clean will mean more time to relax or do the things you love.

What counts as a fixture?

Buying a home entails figuring out the numerous, little-known ins and outs of real estate transactions. As a buyer, one of the questions you may have could relate to fixtures – specifically, what stays in the residence after the home has been purchased?

What generally stays

Generally, built-in appliances, lighting fixtures, shutters, in-ground flowers and plants stay behind at a home when a sale is finalized. In all likelihood, the sellers won't miss these items, as they likely have them in their new residence or no longer have a use or need for them.

Gray areas

While there are clear-cut fixtures as those already mentioned, others may not be completely defined as fixtures. For instance, what if a homeowner had applied window treatments in the residence they've now sold? Do they get to keep them or do they have to stay at the home?

Items like these, as well as free-standing appliances like washers and dryers, are not always considered fixtures. It’s best to ask the sellers’ real estate agent about specific fixtures rather than assuming they will remain with the property after purchase.

How your credit score affects your mortgage

When you are buying a home, it’s important to consider all the factors that comprise your mortgage payment. One factor within your control is your credit score – if you have a higher credit score, you will likely be granted a lower interest rate on your mortgage. Read on for tips on how to improve or maintain your credit score as you purchase a new home.

First, it’s important to understand that your credit score represents your money habits, including your bill payment history, current debt, and your credit history. As payment history comprises 35 percent of your total credit score, it’s important to pay your bills on time and in full. The second highest factor is your total debt, so paying down your credit cards or other loans can positively impact your credit score.

In addition to the factors listed above, your credit score will decrease any time you open new lines of credit, so avoid opening credit cards when you are searching for or buying a home. It is smart to avoid big purchases as you are home searching too, whether you are paying for them in full or purchasing them with credit.

While you may have a house budget in your head based on the money you have saved for a down payment and your total income, it’s important to get a pre-approval from a mortgage lender before you begin your home search. A pre-approval is the estimated price of what you can afford, and it takes into account your credit score and other financial information. A pre-approval not only helps you limit your home search, it can also make your offer more appealing to sellers who want to speed up the closing process.

Should you sell or rent your home?

If you have decided to purchase a second home while mortgage rates and home prices remain near record lows, you may be wondering if you should rent out your current home or list it for sale. Here, SmartMoney offers some advice on the pros and cons of both options.

If you are considering selling your home and you have lived in it for at least two of the last five years, you will likely qualify for a large tax break. By renting your home, you would qualify for similar tax breaks, but if you sell more than three years after receiving the breaks, the gain will be taxed.

While sellers may see larger tax breaks, SmartMoney notes that landlords may also see some perks as there are large deductions available due to depreciation and other expenses. As a landlord, you would be able to deduct almost any expenses paid upfront that have to do with owning or managing your property. This includes mortgage interest payments and property taxes. Maintenance expenses such as cleaning services and utilities may also qualify.

Other advantages of renting your home include keeping the property as it appreciates, and the tax breaks that can make up for income tax when renting. Depending on the amount of your mortgage, you could have your asking rent cover the monthly mortgage payment as well as taxes and insurance payments. However, it’s important to note that being a landlord requires the time and energy to fix and maintain the building for your tenants. You might also consider hiring a part-time caretaker if you can’t manage the updates yourself.

The tax benefits of selling your home might be the greatest reason to do so. An additional advantage comes if you can use the equity on your first home to go towards your new home. From a peace of mind standpoint, having only one home (and mortgage!) to maintain is another good reason to consider selling your home.

Edina Realty is a subsidiary of HomeServices of America, the second largestfull-service independent real estate brokerage firm. Our family of companies serves home buyers and sellers throughout the U.S.

Edina Realty is one of the nation's largest full-service real estate companies with REALTORS® serving the Midwest from Fargo, North Dakota, throughout the Twin Cities, Southern and Northern Minnesota and into Western Wisconsin. Our agents have been guiding home buyers and sellers through the home buying process since 1955 and today provide expertise in property buying and selling, title closing, mortgage loans, new home construction and relocation assistance. EdinaRealty.com offers easy-to-use property search tools with the ability to search home listings as well as properties in foreclosure, open houses and sold homes.